Distractions from financial stress undeniably hinder employee performance, hitting your business hard with real costs.
As a leader, you might experiment with the newest management trends, launch incentive programs, hand out 'employee of the month' awards, or hold weekly goal-setting meetings. But no strategy addresses the core issue: student loans, unaffordable medical bills, and overdue rent affecting your team. These aren't just low-income workers—they're your resilient, driven employees who rarely share their struggles. Too many leaders chase creative perks while overlooking the power of fair pay raises.
Evidence proves wage increases deliver results. Related: Become a servant leader in 4 steps
In early 2015, McDonald's raised its lowest hourly wages by nearly $1, leading to better customer service and a stock price surge of over 25%. Aetna boosted minimum salaries by an average 11% that April, with net income jumping 17%. Henry Ford's iconic $5-a-day wage in 1914 slashed absenteeism and boosted productivity.
Enabling a modest middle-class lifestyle for employees directly enhances your financial performance. At my company, Gravity Payments, implementing a $70,000 minimum salary transformed our business: profits doubled, customer churn plummeted, and turnover halved. For years, I missed this opportunity. While you can scrape by with minimal pay, it's not optimal. No rules prevent investing more in your people.
Wages as a share of the economy hit record highs, per the Federal Reserve Bank of St. Louis. Yet U.S. employee disengagement hovers at two-thirds, per a 2016 Gallup poll, costing the economy $500 billion annually. Above-market pay unlocks untapped productivity and engagement.
Your team holds surplus potential—fairer compensation could be your top 2017 investment. Related: 7 ways to create a sense of family in the office
This article originally appeared in the April 2017 issue of SUCCESS magazine.
